STREETCAR AND BUS OWNERSHIP

HOLDING COMPANIES

When the electric streetcar first became popular in the 1890's, they were at the time among the most major users of electricity. And it became economically practical for streetcar systems and electrical generation to be all part of the same companies. Thus, many streetcar systems were eventually owned by the electric power companies.

And throughout the United States, several large utility holding companies eventually emerged, providing a major portion of the of the nation's electrical generation, along with streetcars. Samuel Insull was the one name most often associated with utility ownership, beginning with Chicago's Commonwealth Edison Co. Insull was also well known with his control of the three major electric interurban railways entering Chicago. And by the 1930's, several other large utility holding companies emerged.

THE MAJOR STREETCAR/UTILITY HOLDING COMPANIES

Listed are only those companies associated with the operation of streetcars or buses or interurban railways. Many city streetcar systems also included suburban or interurban lines, not all of which are mentioned. In addition there were many other electric, gas, and water utility subsidiaries, which are beyond the scope of this Web site, and are not listed.

THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935

This Act was one component of President Franklin D. Roosevelt's "New Deal", created to lead America out of the Great Depression. There were many concerns that the utility companies were motivated too much by profit, rather than serving the people. Rural America particularly felt neglected, with many areas still not wired for electricity. It was more economical and profitable for the utilities to focus on serving urban areas.

The Act would require, that the large holding companies break up into smaller companies, more able to be in touch with the area customers' needs. Common ownership of multiple companies would be prohibited, unless the utility company networks actually interconnected, offering certain economic advantages. Most of the required corporate restructuring occurred in the late 1940's, after World War II.

In addition, the Act would generally prohibit utility companies from owning unrelated industries, including public transportation systems. And the utility companies would be required to find new buyers for their streetcar and bus systems.

BUS HOLDING COMPANIES

Several companies in the automobile industry took notice, that many transit systems would be up for sale. So in 1936, General Motors, Firestone Rubber, Standard Oil, and Phillips Petroleum were involved in the formation of National City Lines (NCL). NCL acquired some systems which had already been converted from streetcars to buses. But the biggest controversy involved those transit systems which were still running streetcars when acquired by NCL. Those companies forming NCL naturally had an interest in supplying buses, tires, and fuel. So after acquiring those streetcar systems, NCL was quick to convert them to buses.

In 1949, these various companies were convicted in federal court of collusion and anti-competitive practices, and were fined $5000 each. Because this conspiracy had already netted these companies millions in profits, this was a case where crime did pay.

Many trolley fans feel that the streetcars might have remained, had NCL not existed to acquire them. But it is possible, that the Public Utility Holding Company Act of 1935 is what ultimately killed the streetcars. Suddenly, these streetcar systems became more readily available for takeover by NCL. The conversion to buses might have occurred anyway, but NCL used illegal practices while carrying out this conversion.

In addition to National City Lines, several other bus holding companies emerged after World War II.